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Section 38, Arbitration & Conciliation Act 1996: Deposits

Section 38 (Deposits) is under Chapter X (Miscellaneous) of the Part I (Arbitration) of the Arbitration and Conciliation Act, 1996.

The contents of the section  is reproduced hereunder:—

“(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit, as the case may be, as an advance for the costs referred to in sub-section (8) of section 31, which it expects will be incurred in respect of the claim submitted to it:

Provided that where, apart from the claim, a counter-claim has been submitted to the arbitral tribunal, it may fix separate amount of deposit for the claim and counter-claim.

(2) The deposit referred to in sub-section (1) shall be payable in equal shares by the parties:

Provided that where one party fails to pay his share of the deposit, the other party may pay that share:

Provided further that where the other party also does not pay the aforesaid share in respect of the claim or the counter-claim, the arbitral tribunal may suspend or terminate the arbitral proceedings in respect of such claim or counter-claim, as the case may be.

(3) Upon termination of the arbitral proceedings, the arbitral tribunal shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the party or parties, as the case may be.”

Extra Notes for Readers

(1) Also, do refer - Section 31A of the Arbitration and Conciliation Act 1996: Regime for costs - check here

This page was last updated on 31st December, 2017.

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